Too old to start your own business?

on Friday, 22 May 2015. Posted in Startup Advice, Accountancy Advice, Business Advice

Too old to start your own business or build a plane?!

Don’t you believe it! The world loves to scare us: I have seen a caption doing the rounds on Facebook that said an “Entrepreneur is someone who jumps off a cliff and builds a plane on the way down”. No! Per my dictionary an Entrepreneur is “a person who sets up a business or businesses, taking on financial risks in the hope of profit”, which is just as well as I couldn’t build an aeroplane, even if I was still on the ground!

We like to read stories of college students setting up high-tech businesses that grow and make them multi-millionaires. The reality for most business owners is something different.

Some of Aysgarth’s most popular tweets have been those that reported news stories about older Entrepreneurs. One popular Tweet we issued was based on the BBC news story that said that 38% of business founders were over 40.

And according to the Office of National Statistics (ONS) when the large increase in the self-employed between 2008 and 2012 was looked at 84% of them were aged 50 or over. So the answer to my title question is a resounding no!

Interestingly the ONS think that 38% of the self-employed are aged between 35 and 49 with a further 34% aged 50 to 64 years old.

So if you have always wanted to be your own boss and you have a great idea or have seen a gap in the market or you simply think you can provide a better service than your current employer then I recommend you count the cost and seriously think about starting your own business. Read some of our blogs that cover start-up issues and when you are ready get in touch so we can help you as you start out on this exciting new venture!

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Are you paying too much tax?

on Wednesday, 15 April 2015. Posted in Accountancy Advice, Tax Advice

Are you paying too much tax?


I am always surprised at how many employees who are paid under PAYE have no idea about their tax affairs and are therefore paying too much tax. Are you one of them? You need to ask yourself: Am I paying too much tax?

Do you know what your Tax Code is? And more importantly how much it should be? Have you ever received a PAYE Coding Notice and did you read and take time to understand it?

In the 2015/16 tax year, which covers the 12 months from 6 April 2015 to 5 April 2016, everyone pays no tax on their first £10,600 of income (this figure is correct at the time of writing but may subsequently change). This means most people will have a tax code of 1060L. For the 2014/15 tax year the usual code was 1000L.

If you have a different code do you know why? If you don’t then you should call HMRC (HM Revenue and Customs) on 0300 200 3300 and ask them – but please allow at least 40 minutes to get through!

Let me tell you about two case studies:

An employee left her job with one of the top 4 banks and set up her own business. I reviewed her old tax code, which just looked wrong. Then going back over a few years managed to get her a tax refund of £3,161.41.

The problem was that the bank had told HMRC about some benefits in kind, so they correctly altered her tax code, but the employer then processed her salary as if they had paid her a sum equal to the benefits in kind. She was therefore taxed twice.

The second case was where an employee had two jobs. HMRC had placed all her personal allowances with the second job that she eventually stopped. Her main employment suffered with a tax code of BR. This meant everything she earned was taxed and she suffered with no tax-free amount for years. Again I was able to get her a refund.

However in both cases the refunds could have been more but we were restricted by how many tax years we could go back.

Action: you need to check and make sure your tax code is correct and keep checking it every year. If you ever get a PAYE Coding Notice letter then read it!

I cannot guarantee you are due a refund but are you certain you are paying the correct amount of tax?

Simon Young

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Cookie-Cutter Approach?

on Saturday, 13 December 2014. Posted in Accountancy Advice, Business Advice, Cloud Accounting, Tax Advice, Contractors

perhaps it is time for a change as we are not all from the same mould

Are you an individual or a commodity? And what about your business? We treat our clients as individuals. We go out of our way to listen to and to understand our clients. That means we recognise they have choices, which they will exercise based upon their knowledge. All clients are different.

We will recommend what we think is the best approach but if the client wants to take another way (and it is legal!) we will work with them.

For example, we generally do not think spreadsheets or desktop accounting packages are the best way for most small businesses to record their bookkeeping. We recommend Cloud-based accounting packages, for example Xero or IRIS KashFlow. If a client, however, wishes to use another package or spreadsheets we will not sack them, unlike some other accountancy practices.

Likewise we will recommend the approach for owners of family run businesses to take in order to pay themselves. If the owner-managers wish to take another legal approach then once we comprehend their reasons we will work with them, we will not take our bat home.

If you do not like accountants (or other suppliers) dictating how you should operate then perhaps it is time for a change, time for a different approach, as we are not all from the same mould.

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“My mate in the pub says…”

on Saturday, 25 October 2014. Posted in Startup Advice, Accountancy Advice, Business Advice, Tax Advice

Choose your advisers carefully as cheap isn’t always best value for money

Choose your advisers carefully


I hate it when I receive a call from a client that starts "My mate in the pub says..." As a general rule whatever follows next will be answered: no. The best example I had of this was many years ago and the call went like this:

Client: My mate in the pub says he doesn't pay any tax. So why do I pay tax?
Me: Where does your friend live?
Client: Switzerland
Me: And where do you live? [I already knew the answer to this question!]
Client: Bradford
Me: Well, if you want to go and live in Switzerland then a Swiss accountant might be able to help you achieve the zero tax goal but if you wish to stay in the UK and earn what you are earning then there will be tax to pay.

Choosing the right adviser is important. Your family and friends may be knowledgeable and good in their chosen field but paying for independent and professional advice from an expert is an important investment.

We were recently asked what one piece of advice we would give an entrepreneur, our answer was get good advisers. Good advisers should be good value for money but they might not be cheap and will probably not be free.

We set up many limited companies and charge for it. I have met individuals who only approached an accountant after they had incorporated their businesses themselves. Sometimes this was perfectly done but two incidents stick out in my mind. The first was the company where the shareholders decided they would put their £8,000 redundancy into the company. Instead of having a small share capital and lending the company the balance, it all went in as shares. The second was the company where the husband was a director and the husband and wife were both company secretaries. Neither of these cases were necessarily wrong they were just unorthodox and when I asked them why their company was structured the way they had chosen they could not answer the question.

In life you usually get what you pay for. Following cheap or free advice may end up being the most expensive decision you ever make. We are not the cheapest accountants but we do look after our clients and give advice. One client who left for a cheap accountant soon came back to us. On another occasion we lost the informal tendering process on price but once we pointed out some of the errors their current cheap accountant had made (and we later discovered even more mistakes) they decided we would be good value for money and another client was won.

Be friendly, go to the pub with your mates, but choose your advisers carefully. We love questions and want our clients to approach us if they have a worry about anything and because of that we have many wonderful and varied discussions. But we do not advice clients after an evening in the pub!

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Business, spelling and grammar

on Wednesday, 23 October 2013. Posted in Startup Advice, Business Advice

I am shocked by the poor grammar and spelling in some business correspondence, as an example I recently received this email:


I'm following upon my previous email to see if you would be interested in discussing about my primary email. It would be great if you can forward this email to the right person.
Apart from this aru you looking any think let me know i will get back to you more information as soon as possible and in most cases within 2 hours.

Let me know your targeted industry---and targeted area------[any sector ] based on that I will send few samplies.

I appreciate your time, Regards..."

This genuine email contains spelling mistakes, incomprehensible sentences, is addressed incorrectly (where is my name?) and those square brackets suggest that the proforma email has not been edited correctly.

What a waste of time and effort! The email did not generate a penny of business for the sender.

Whilst this is an extreme example many native English speakers make stupid mistakes: from CVs to business letters poor grammar and bad spelling simply close the door to business opportunities.

Another recent email contained the following: "...just a few hundred meters from Wetherby town centre..." I think they meant to say a few hundred metres, which is a distance, and not that you had to pass a few hundred gas, or electric, meters to get to Wetherby town centre.

Does this matter? Despite the many spelling and grammatical mistakes I make, I think it does. Mistakes give the wrong impression and therefore get in the way of winning new business and make you appear unprofessional. Take time to read and re-read your written work – does it really say what you think it says? Or does it say something completely different?

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Why Don’t You Send Statements Out?

on Tuesday, 01 October 2013. Posted in Startup Advice, Accountancy Advice, Business Advice, Cloud Accounting

With modern technology sending statements really is easy and very efficient

Do you send your customers a statement of account? It really is a simple idea and helps credit control.

Using a Cloud Accounting package like Xero means you can email your statements as often as you want. We email ours three times a month: on the 10th, 20th and the last day of the month. We choose which debtors to send them to and it is amazing how often payment is received within a few hours of the statements being sent out.

With modern technology sending statements really is easy and very efficient – a few clicks and they are emailed out to your customers.

Keep the statement simple by listing all the outstanding transactions. There is no need to show all the movement for a month. As businesses rarely send out cheques there seems little point having a statement that can be split into two to become a remittance advice – if the writing is too small it will not be read!

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Social Media

on Friday, 23 August 2013. Posted in Accountancy Advice, Business Advice

We have won clients through Twitter – have you?

We have won clients through Twitter – have you?

Social Media has changed so much in our lives and businesses. It has long ceased to be the preserve of teenagers.

Businesses have been on Facebook and Twitter for a number of years now. It is a great way of reaching a large number of people and businesses – potential customers. However care must be taken, do you remember the negative PR over the McDonalds' Twitter campaign #McDStories and Waitrose’s #WaitroseReasons?

We have much to learn about Twitter and other social media, but in a recent report looking at accountants in Leeds we were:

1st in the Top Twitter Account by Average Quality of Tweets, beating the Big 4 and other Top 10 firms;

7th in the Top Followed Twitter Accounts (and first independent firm); and

7th in the Top Twitter Accounts by Overall Score (and first independent firm)

So here are our thoughts on Twitter:

Twitter tip No. 1. Do not send an automatic Direct Message when someone follows you. A personalised Tweet is so much better. We immediately unfollow anyone who sends us unwarranted DMs.

Twitter Tip No 2. Don't RT literally every Tweet on your timeline as you will clog up ours! We need to see the wood from the trees.

Twitter Tip No.3 Clever users of Twitter sometimes stop talking and instead start listening.

Twitter Tip No 4: There is a balance to be had here, but do not repeat your tweets too many times. Repetition can be bad.

Twitter Tip No 5: Do not send loads of Tweets all at the same time but allow some delay between tweets. Seeing 5 tweets in a row from the same person or organisation looks odd. They won’t be read. Some systems allow you to schedule your tweets to go later on in the day.

Twitter Tip No 6 Do not let Bots tweet on a regular basis for you. On Christmas Day we do not want to read – “Happy Tuesday what are you all up to today?”!! And we couldn’t care less how many followers you have lost today or what you have just bought from Amazon.

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VAT and the startup business

on Monday, 11 March 2013. Posted in Startup Advice, Accountancy Advice, Tax Advice, VAT advice

VAT1 Application for VAT registration

One of the many issues we discuss with people starting out in business for the first time is VAT, the dreaded Value Added Tax.

Should your new business be VAT registered? Consider your expected sales levels and who your customers are. Also think about the expenditure you will be incurring. When you register for VAT you can reclaim VAT on any services incurred in the previous 6 months or any assets that are less than 4 years old that you still have: i.e. fixed assets and stock.

Consider one of the many VAT schemes. Cash accounting is great if you sell to other businesses and have to charge VAT. VAT is only accounted for as you receive the cash or pay it over. However only small businesses can use this scheme – you have to plan for the cash flow issue of when your business out grows the scheme.

The flat rate VAT scheme can be useful but it depends on the rate that has been allocated to your sector and how much VAT you think you will suffer. The scheme is wonderfully simple and there is an additional 1% reduction in the flat rate during the first year of trading. Be careful because many accountants over look this scheme.

Also be careful of property and VAT, which can be a minefield. Talk to an experienced qualified accountant about this area.

The VAT registration limit increases each budget and there is a trap here that everyone must be aware of. The VAT limit covers a 12 month period. This year is any 12 month period. Your accounts might show that in each of two years you kept below the current registration limit, however if your sales were not incurred evenly but were bunched together at the end of one accounting period and at the start of the next then you may quite easily have gone over the limit. This can be a disaster if you get it wrong. If you cannot go back to your customers to recover the VAT then you must pay it out of your profits, and there will also be penalties and interest to pay.

If you wish to discuss VAT further please get in touch.

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Cloud Accounting

on Thursday, 14 February 2013. Posted in Startup Advice, Accountancy Advice, Business Advice, Cloud Accounting

Cloud accounting: Xero's dashboard. email for more information


Small and medium sized (SMEs) companies use a number of different ways to record their accounting transactions:

1. Manual books of account: ok, not many do nowadays but I could introduce you to some who do.

2. Spreadsheets are often used and I am always amazed by the mistakes they contain. There are often formula errors, the formatting could be improved etc.

3. Accounts packages which rely on backups being emailed to the accountant.

4. Cloud accounting packages.

We think the last one is the best solution. We can see your records and how your business is doing simply by logging on to the internet. We see live data and there is no reconciliation needed between the year end accounts and your records.

You can process your bookkeeping transactions or keep a check on your business' finances wherever you are – imagine reconciling the bank account whilst on a train!

It also means we can have an intelligent conversation about your finances as we are both instantly seeing the same live data.

There are many cloud solutions available: FreeAgent, KashFlow and Clear Books amongst others but the one we prefer is Xero. It is straightforward to use and causes us to get passionate about it. It looks very smart as you can see from the dashboard above and the bank reconciliation below.

And talking of bank reconciliations: they are very simple. You can either have live feeds from your bank or you can download bank statements into Xero and then you simply click away. Rules can be set up so Xero remembers where to post the transaction but always allowing you the final authorisation.

Xero takes away the problem of paying for upgrades – they are all included in the cost so you and I are on the same version and there are no compatibility issues. And whilst there is a small monthly fee to operate it you can have as many users as you want at no extra cost.

So we love cloud accounting and especially Xero and look to assist more SMEs in their move across to the future of bookkeeping and accounting.

 Xero Bank Reconciliation

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The New Year: Time to start a business?

on Saturday, 15 December 2012. Posted in Startup Advice, Accountancy Advice

The New Year: Time to start a business?

Over the Christmas holiday period what will you be thinking about? Brussels sprouts or something more significant?

What will your New Year Resolution be? Will it be to set up your own business?

Family run Owner Managed Businesses (OMBs) are the backbone of this country. According to the Department for Business Innovation and Skills (BIS) Small and Medium-sized Enterprises (SMEs) account for 99.9% of all enterprises, employ 58.8% of all private sector employees in the UK and account for 48.8% of private sector turnover.

Whilst this suggests SMEs could be more productive their owners are probably enjoying more flexible working arrangements. Sometimes they may work until after 11 pm but at other times they will be sat watching the school nativity play. And the best thing about setting up your own business? There is no boss telling you what to do!

So think about your business idea, think about how to fund it, what you will survive on whilst you are establishing it but sometimes the diver has to stop thinking and they just take that dive off the board and into the pool. Which is why a lot of people who find themselves without a job set up their own business, explaining the BIS statistic that from the start of 2010 to the start of 2011 the number of SMEs increased by 94,000 – a 2.1% increase.

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Tax, Child Benefit and Fairness

on Thursday, 22 November 2012. Posted in Tax Advice

Tax, Child Benefit and Fairness

Have you received your High Income Child Benefit Charge letter? Mine arrived today, 22 November 2012.

In the present economic climate it is correct that child benefit should be looked at and the government assess whether or not it should keep paying it, especially to the better off in society. I do not have a problem with that. My issue is the ridiculous way the government is introducing the reforms.

If a couple both earn £49,000 they keep all the benefit, but if a single parent earns £50,001 he or she will start to lose some of the benefit and if they earn over £60,000 they lose the lot. How can it be right that one household with a total income of £98,000 still receives child benefit whilst another with £60,000 does not get any?

The new policy is being introduced on 7 January 2013. Why is the policy not being introduced at the start of a tax year, say 6 April 2013? This would be a lot simpler and straight forward.

The result of this tax reform is that 500,000 more people are likely to have to prepare and submit self assessment tax returns. The present government pays lip service to cutting bureaucracy but if it really wanted to why are taxpayers, who probably have extremely simple tax affairs, being made to file their own returns or pay my profession to do it for them?

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Does your accountant understand your sector?

on Monday, 15 October 2012. Posted in Startup Advice, Accountancy Advice, Business Advice, Tax Advice

Does your accountant understand your sector?

You ask the average accountant what they specialise in, and once you have got over the blank expression on their face, they will tell you SMEs or family owned businesses or maybe even owner managed businesses.

And that is all very well but do they understand what you do, how it should be accounted for and what special tax problems there are?

As examples:

Caravan and Holiday Home Parks are trading businesses that HM Revenue and Customs try and classify as investment businesses. Turnover is therefore ALWAYS called "Pitch Fees". If your accountant describes them as "Rent" – sack them now, it could cost you 18% more tax when you come to sell out!

Importers/Exporters often take deposits from customers and pay them over to suppliers before the commencement of the transaction. This means customers are technically creditors and suppliers are debtors – which is the "wrong" way round for most companies. It obviously makes perfect sense and is correct, but if you see your accountant scratching their head, then it's time to move to a new one!

Unfortunately the above are real life examples that I have come across and I am sure others have examples as well.

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We love Cloud Accounting and think it is the way forward for most businesses. We are Silver Partners with Xero Online Accounting Software and Certified Partners of IRIS’s KashFlow. Please contact us for more information on Cloud Accounting and also read our blog.